Uprooting your life and family to move to presumably greener pastures is hard enough. Adding to the difficulty for many immigrants though is that upon arrival in their new home, they show up with no locally recognized credit history. And it’s not just immigrants from countries with notoriously suspect financial institutions; online message boards are filled with tales of people arriving from the United States, England, and other countries with strong economic and financial ties to Canada who are given the runaround when they apply for credit cards. There are a few options, however, for trying to build that all-important credit rating.
Your Secured Credit Options
Provided you have some cash on hand, the simplest way to get a credit card is to pay for it in advance with a secured card. Keep in mind that these are different from pre-paid credit cards where you simply load up a card and use it until the balance is depleted. With a secured card, as part of the application process you make a security deposit on the card. Based on whatever credit information you are able to provide the financial institution, you’ll get a credit limit on the card for as much as or even more than your deposit. With the Capital One Canada Guaranteed Secured MasterCard, for example, applicants can get a credit limit of $300 or more for deposits ranging from $75 to $300. You’ll also get a monthly bill, and your payment information will be provided to credit bureaus. A few months of timely bill payments may be enough to get you on the road to non-secured credit.
Some banks have realized the niche for newcomer credit card business, and are setting up special packages as a result. For example, RBC offers its Cash Back MasterCard (no annual fee and a 19.99 per cent interest rate) with no credit history required as part of its Welcome to Canada banking package. To apply, visit and RBC branch and be sure to have your passport or Permanent Resident Card ready.
Cashing In On Retail Credit
Walk into any major retail outlet like Canadian Tire or a grocery chain like No Frills and, odds are, you will be greeted by someone trying to offer you a store-branded credit card. While it can be a minor annoyance for those of us who already have a wallet full of credit cards, for the new immigrant, the relatively lax restrictions on store issued cards can be a godsend.
The catch with retailers cards is that they tend to charge interest rates at the high-end of the spectrum – typically just shy of 30 per cent. Provided you’re able to pay off your bill in full each month, that’s not a problem. But when you’re trying to establish a positive credit rating, the compounding interest can quickly spiral into a debt disaster.
Appeal to the Branch Manager
While online and ATM banking can feel impersonal, there are still flesh-and-blood employees working in bricks-and-mortar branches. And you might find some luck appealing to the ones that work in your local branch, particularly if it’s a job that’s brought you to the country. Set up an appointment with the branch manager and show them a letter from your employer stating your salary. Tell them you’re interested in opening a chequing account and getting a credit card along the way to getting yourself your first Canadian mortgage. And casually remind them if they’re not interested in your business, the competing branch across the road just might be.
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